As mobile technology has advanced, the ability to make monetary payments from one's mobile device has become an increasingly useful feature. Typically, a specialized application is downloaded to the mobile device, and the application stores information about the user's debit and/or credit cards. Depending on the device and on the payment model, transactions may be completed using mobile communication protocols such as short messaging service (SMS) or unstructured supplementary service data (USSD). More recent payment models have also implemented near field communication (NFC) technology, in which the mobile device is placed in proximity to an NFC terminal to complete the transaction.
As the use of this technology grows, so too does the risk of fraudulent attacks on the mobile devices. Thus, effective fraud detection is critical. Conventional fraud detection mechanisms are based on historical transaction data. For instance, a transaction that deviates significantly from a user's typical usage patterns may generate a fraud alert. However, in many cases, this approach can result in a false positive; that is, a legitimate transaction by the authorized user may be prevented if it is different enough from the user's transaction history, leading to user dissatisfaction. On the other hand, fraudulent usage that is similar enough to the historical patterns may go undetected.